Saturday, March 30, 2013

in washingtonsblog but many things in the links related to banking and money creation are not clear to me. An interesting excerpt from from Benjamin Franklin's observations starting with a trip to London in 1764:
"When he arrived, he was surprised to find rampant unemployment and poverty among the British working classes… Franklin was then asked how the American colonies managed to collect enough money to support their poor houses. He reportedly replied:

“We have no poor houses in the Colonies; and if we had some, there would be nobody to put in them, since there is, in the Colonies, not a single unemployed person, neither beggars nor tramps.”

In 1764, the Bank of England used its influence on Parliament to get a Currency Act passed that made it illegal for any of the colonies to print their own money. The colonists were forced to pay all future taxes to Britain in silver or gold. Anyone lacking in those precious metals had to borrow them at interest from the banks.

Only a year later, Franklin said, the streets of the colonies were filled with unemployed beggars, just as they were in England. The money supply had suddenly been reduced by half, leaving insufficient funds to pay for the goods and services these workers could have provided. He maintained that it was “the poverty caused by the bad influence of the English bankers on the Parliament which has caused in the colonies hatred of the English and . . . the Revolutionary War.” This, he said, was the real reason for the Revolution: “the colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction.”

Friday, March 29, 2013

I thought that hundred thousand euros was lot of money to put in a bank. Today Age has a story about a Cypriot_Australian who worked in Australia for over thirty years, retired to Cyprus in 2007 with his life savings of a million Australian dollars, deposited in Laiki Bank and has been living on the interest.

Meanwhile, some of those who took advantage of tax shelters seem to be doing fine. WSJ has an article 'Wealth Over The Edge: Singapore' "But over the past decade, Singapore has undergone a dramatic makeover, as the rich and famous from Asia and beyond debark on its shores in search of a glamorous new home—and one of the safest places to park their wealth." Akshay Regulagedda who linked it on Facebook mentions that an Indian cabinet minister goes there for a haircut every two months.One problem seems to be banks too big in comparison to a country's GDP. From an article coming from a German Foundation "For the Germans, the Cypriot saga played into political tropes about moral hazard and free-riding tax havens. One German public intellectual described Cyprus in the Financial Times as a "cesspool of profligacy and haven for tax-dodging Russian oligarchs." German media are providing detailed analyses of other tax havens to which their countrymen might be exposed. The daily Die Welt declared recently that the tax haven as an economic model has been "exhausted." Luxembourg, with a financial sector more than five times the size of its €44 billion GDP has come under particular scrutiny. With a financial sector twice the size of its GDP, the United Kingdon could also become a point of interest."
In The Debate on Bank Size Over "What really moves the needle in terms of consensus among policy makers and the broader public opinion is when events combine with a new understanding of how the world works. Thanks to Senator Sherrod Brown, Democrat of Ohio; Senator Warren, Democrat of Massachusetts, and many other people who have worked hard over the last four years, we are ready to understand what finally defeated the argument that bank size does not matter: Cyprus."Nothing will happen soon says The Atlantic And there are the problems that Holder mentioned

Thursday, March 28, 2013

City of LondonSpider at the centre of tax havens by Nicholas Shaxson, the author of Treasure Islands. George Monbiot on London Corporation "There are 25 electoral wards in the Square Mile. In four of them, the 9,000 people who live within its boundaries are permitted to vote. In the remaining 21, the votes are controlled by corporations, mostly banks and other financial companies. The bigger the business, the bigger the vote: a company with 10 workers gets two votes, the biggest employers, 79. It's not the workers who decide how the votes are cast, but the bosses, who "appoint" the voters. Plutocracy, pure and simple" According to Shaxson, the rest of the votes is 23,000 and Blair wanted to increase it to 32,000. Shaxson has a new article on the new rich in the City of London 'A Tale of Two Londons' "A decade or so ago, that may have been true. But today another class sits above even them—the global commodity plutocrats: owners of mineral rights, or dominant players in mineral-rich countries in sectors such as construction and finance that benefit from commodity booms." Some of them live in One Hyde Park built by Candy brothers. One of them names his children Monaco and Cayman.Krugman on Cyprus 'Treasure Island Trauma' "But step back for a minute and consider the incredible fact that tax havens like Cyprus, the Cayman Islands, and many more are still operating pretty much the same way that they did before the global financial crisis. " and 'Hot Money Blues' "one thing seems certain: for the time being, and probably for years to come, the island nation will have to maintain fairly draconian controls on the movement of capital in and out of the country....I am, of course, not the first person to notice the correlation between the freeing up of global capital and the proliferation of financial crises; Harvard’s Dani Rodrik began banging this drum back in the 1990s. Until recently, however, it was possible to argue that the crisis problem was restricted to poorer nations, that wealthy economies were somehow immune to being whipsawed by love-’em-and-leave-’em global investors. That was a comforting thought — but Europe’s travails demonstrate that it was wishful thinking." Felix Salmon reminds "Cardiff Garcia looks at at a meta-study on capital controls and finds that only once — in Malaysia — were they effective. In that case, the controls were “accompanied by aggressive counter-cyclical spending, bans on short-selling the currency and trading it offshore, and defending the ringgit against speculators by fixing it to the dollar”. Those things aren’t happening in Cyprus and won’t be."Andrew Watts in 'Mario Draghi's Economic Ideology revealed' "In other words the productivity measure includes inflation, the wage measure does not."Daniel Little 'Michael Mann on Power' "This is an amazing corpus, and I think it throws important light on both the theory and the history. It is historical sociology on a macro-scale; and yet Mann also provides careful, almost ethnographic details at the level of individual actors -- fascists, ethnic paramilitaries, legislators, colonial administrators. So I think Mann also offers a great example of a sociologist who is not prisoner to a single methodology or a single avenue of approach to these supremely complex social processes.:

Tuesday, March 26, 2013

in Why the world needs reckless bankers"In fact, long-term wealth creation accrues most to societies in which the financial system most willingly funds risk-taking entrepreneurs. But the more a financial system is willing to finance risky new ventures, the greater the likelihood of banking instability.

.........

We should allow localised – manageable – banking crises to occur more often.

.....

What might in fact be best for the US and the world may be more and smaller banks, tougher and even ruinous competition, more bankruptcies, more kinds of financial institutions and a regulator whose main function is to enforce transparency and to manage periodic crises with countercyclical measures. Perhaps then we might even prefer a little more 19th-century-style “reckless banking”.'

Monday, March 25, 2013

article Chinna Jeeyar Swamy
"We have heard several stories and legends about God incarnations, Godman, and Acharyas in the past, but very rarely can we come into the living presence of divinity like, His Holiness Tridandi Srimannarayana Ramanuja Chinna Jeeyar Swamiji.......For about four years i.e. from 1985 to 1988 there was a continuous and constant failure of rains in Andhra Pradesh. The state in general and Hyderabad in particular were reeling under the conditions of drought. Sri Swamiji was merciful enough to perform a Varuna Yagna in Hyderabad for a period of 9 days. From the last day of the yagnam (i.e. Poornahuti day) miraculously there were a heavy rains."I missed him on visits to A.P. but it seems from his Facebook account he has been visiting Australia. May be I can find about Vedic science and look for a job in his university if there is a Cyprus type crisis here.

Probably very well known but I noticed it only todayLos Alamos From Below: Reminiscences 1943-1945, by Richard Feynman
Some excepts. First about cracking safes "Once, however, I did open a safe purely by accident, and that helped to reinforce my reputation. It was a sensation, but it was pure luck...... For 20 minutes I turned pi upside down. Nothing happened.

So I started walking out of the office, and I remembered in the book about the psychology, and I said, “You know, it's true. Psychologically, DeHoffman is just the kind of a guy to use a mathematical constant for his safe combination. And the other important mathematical constant is e.” So I walk back to the safe. 27-18-28 - click, clock, it opens."

About meeting Niels Bohr "Then the son told me what happened. The last time he was there, he said to his son, “Remember the name of that little fellow in the back over there? He's the only guy who's not afraid of me, and will say when I've got a crazy idea. So next time when we want to discuss ideas, we're not going to be able to do it with these guys who say everything is yes, yes, Dr. Bohr. Get that guy and we'll talk with him first.""

About watching the first atomic bomb explosion:

"The next thing that happened, of course, was the ' I 'test, after we'd made the calculations. I was actually at home on a short vacation at that time, after my wife died, and so I got a message that said, “The baby is expected on such and such a day."

I flew back, and I just arrived when the buses were leaving, so I went straight out to the site and we waited out there, 20 miles away. We had a radio, and they were supposed to tell us when the thing was going to go off and so forth, but the radio wouldn't work, so we never knew what was happening. But just a few minutes before it was supposed to go off the radio started to work, and they told us there was 20 seconds or something to go, for people who were far away like we were. Others were closer, 6 miles away.

They gave out dark glasses that you could watch it with. Dark glasses! Twenty miles away, you couldn't see a damn thing through dark glasses. So I figured the only thing that could really hurt your eyes - bright light can never hurt your eyes - is ultraviolet light. I got behind a truck windshield, because the ultraviolet can't go through glass, so that would be safe, and so I could see the damn thing. OK.

Time comes, and this tremendous flash out there is so bright that I duck, and I see this purple splotch on the floor of the truck. I said, “That ain't it. That's an after-image.” So I look back up, and I see this white light changing into yellow and then into orange. The clouds form and then they disappear again; the compression and the expansion forms and makes clouds disappear. Then finally a big ball of orange, the center that was so bright, becomes a ball of orange that starts to rise and billow a little bit and get a little black around the edges, and then you see it's a big ball of smoke with flashes on the inside of the fire going out, the heat.

All this took about one minute. It was a series from bright to dark, and I had seen it. I am about the only guy who actually looked at the damn thing the first Trinity test. Everybody else had dark glasses, and the people at six miles couldn't see it because they were all told to lie on the floor. I'm probably the only guy who saw it with the human eye.

Finally, after about a minute and a half, there's suddenly a tremendous noise - BANG, and then a rumble, like thunder -- and that's what convinced me. Nobody had said a word during this whole thing. We were all just watching quietly. But this sound released everybody- - released me particularly because the solidity of the sound at that distance meant that it had really worked.

Friday, March 22, 2013

While trying to follow the recent Cypress events, I came across this quote from Nicholas Shaxson's book 'Treasure Islands':
"Having gone out of its way to welcome wealthy Arabs in the 1980s and rich Japanese and oil-rich Africans in the 1990s, the City has more recently, with the help of conduit havens like Cyprus, aggressively courted Russian oligarchs, providing them with bolt-holes beyond the reach of Russian law enforcement. By April 2008 a hundred companies from the former Soviet Union’s Commonwealth of Independent States (CIS) were listed on the London stock exchange…"Here are some more excepts from the book http://www.thirdworldtraveler.com/Global_Secrets_Lies/Treasure_Islands.htmlI am midway through the book and find it a fascinating account of globalization from around 1955, particularly the last thirty years.Paul Krugman says in 'Treasure Island Trauma':"A couple of years ago, the journalist Nicholas Shaxson published a fascinating, chilling book titled “Treasure Islands,” which explained how international tax havens — which are also, as the author pointed out, “secrecy jurisdictions” where many rules don’t apply — undermine economies around the world. Not only do they bleed revenues from cash-strapped governments and enable corruption; they distort the flow of capital, helping to feed ever-bigger financial crises.One question Mr. Shaxson didn’t get into much, however, is what happens when a secrecy jurisdiction itself goes bust. That’s the story of Cyprus right now. And whatever the outcome for Cyprus itself (hint: it’s not likely to be happy), the Cyprus mess shows just how unreformed the world banking system remains, almost five years after the global financial crisis began."An excellent review of Shaxson; book 'Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens' and 'Winner-Take-All Politics: How Washington Made Rich Richer- and Turned Its Back on the Middle Class' by Jacob Hacher and Paul Pierson appeared in the London Review of Books last year. It is 'Did not they notice? Offshore' by David Runciman. Excerpts from Runciman's review:"This is the web, but where is the spider? At the heart of Shaxson’s story lies the City of London, itself a kind of island within the British state. Again, the rise of the City as the favourite place for foreigners to park their money, no matter who they were or where it came from, is related to imperial decline. After the Second World War, sterling still financed much of global trade, but the British economy was no longer able to sustain the value of the pound against the dollar. In the aftermath of Suez, which caused a run on the pound, the government attempted to impose curbs on the overseas lending of London’s merchant banks. The response of the banks, with the connivance of the Bank of England, was to shift their international lending into dollars. The result was the creation of the so-called ‘Eurodollar market’ – which was effectively an offshore haven. Because the trade was happening in dollars, the British saw no need to tax or regulate it; because it was happening in London, the Americans had no means to tax or regulate it. ....US policy-makers were now in a dilemma. They could try to face down the threat of offshore, either with higher domestic interest rates, or with tighter controls on currency outflows and a tougher regulatory regime requiring US banks to share information about their overseas activities. Or they could copy London by creating an offshore world of their own closer to home: in other words, if you can’t beat them, join them. The second was the path of least resistance – among other things it was a useful way of reinforcing the dollar’s position as the global reserve currency – and over time it was the one they took. .......

What happened to the representatives of all those people who don’t have lots of money to move around, who can’t relocate even if they wanted to, and who have an interest in a fair, open and broadly progressive tax system? Didn’t they notice what was going on?

This is the question that Jacob Hacker and Paul Pierson tackle in Winner-Take-All Politics. They don’t spend much time talking about offshore, but the story they tell has striking parallels with the one laid out by Shaxson. One of the ways you can identify an offshore environment, according to Shaxson, is that local politics gets captured by financial services. In that sense, Washington has gone offshore: its politics has been captured by the interests of a narrow group of very wealthy individuals, many of whom work in finance. For Hacker and Pierson this, more than anything else, explains why the rich have got so much richer over the last 30 years or so. And by the rich they don’t mean simply the generally wealthy; they mean the super-rich......

All this happened because the politicians followed the path of least resistance – as elected politicians invariably do – and the better organised and better-funded resistance came from the representatives of big business, not organised labour."

There is more about the increasing inequality and damage to the developing countries in the book. My take away point is a quote of Keynes in Shaxson's book which is almost Gandhian:"Let goods be homespun whenever it is reasonably and conveniently possible. Above all, let finance be primarily national'.

Thursday, March 21, 2013

Yves Smith has comprehensive report 'Cyprus: Will the Mouse that roared be Gored?', from money laundering and arms trade to Nato bases. As some of the comments point out, some of the points not covered are "The UK has a large money-laundering and tax-free system explained in Vanity Fair this month. It is independent from the UK government. Perfect to process the overseas money even from Russia while maintaining their air base in Cyprus. Perhaps the EU will have new respect for the global implications of their financial instability." "Cyprus and Iceland demonstrate that it is easier to impose unpopular, and unjust, antisocial measures in larger countries. Why?" "...the Archbishop of Cyprus formally placed the entire wealth of the Greek Orthodox Church of Cyprus at the government’s disposal this morning..." etc

Barkley Rosser in 'Who Got Iraq's Oil Ten Years After the War Started': "The big winners in the oil industry in Iraq are the Chinese, followed by the old Saddam era operators from France and Russia, along with upstarts from Norway and Canada. The US companies are only now beginning to get any pieces of the action, but not in the largest producing areas in the main parts of Iraq, but in the one part of Iraq that clearly can be said to be in better shape now than prior to the US invasion, the semi-autonomous Kurdish region of Iraq that was not on anybody's radar screen before as a major possible oil producing region. I am quite certain this is not what Cheney either expected or hoped for."

Friday, March 15, 2013

emphasized in 'Binge Learning'.... "This seems like a more natural way to learn than traditional educational structures can offer: develop an interest and mercilessly indulge it until another interest supersedes it. It is a method that conserves the mental energy associated with willpower, leaving more of the brain’s resources to focus on the material itself. Since it relies on the student actually being interested in the class, it is hard to fit into a physical schooling environment, where classes have to begin on a schedule, go slow enough for everyone to keep up, and run in parallel with other classes.

Online education also saves the resources associated with context switching. Humans are notoriously bad multitaskers. Each time a high school student has to change classes, she has to quickly stifle the thoughts and questions raised in previous classes to focus on the current class. She has to expend mental resources remembering where the previous session of the current class left off. And when she returns to the class that stimulated the thoughts that had to be stifled, she may not recall them. Far better to focus on—or even to binge on—one subject until she is at a good stopping point."

I am not sure about all the points above. If one does not practice and use what one learns, it can disappear quickly. The traditional method of learning over a long period several things also involves sleeping over what one is learning and helps retaining it. With older students with specific interests and motivation, I am sure online learning helps. I am sure that online learning is here to stay but it is still evolving and people have to figure out what works for them for which topics in which combinations.

Thursday, March 14, 2013

The author of "Is It All About Hips?Around the World with Bollywood Dance", in the article "Dancing to an Indian Beat:"Dola" Goes my Diasporic Heart" has a four page description of 'Dola re Dola' from (republished in "Global Bollywood: Travels of Hindi Song and Dance"):
"The lyrics play an important role in determining the meaning of the dance. During the recurring refrain, the two women execute a series of movements in unison to the lyrics: "Hey dola re dola re dola re dola" (Hey, I swayed, I swayed, I swayed), "Haai dola dil dola mann dola re dola" (Oh, my heart swayed, my spirit swayed).The movements incorporating a gentle sway of the hips from side to side, with one arm behind the head and a look off to the diagonal, stress the sway of women's hearts, caused by their love for Devdas, is the pretext for the performance.. Their movements are echoed by female dancers in foreground and male dancers in the background as the "dola" or "sway" of the hear motivates their dance. The recurring movement establishes unity between the two women as they compare the depth of their affection for Devdas.
....
Leading to the climax, Paro and Chandramukhi repeat a variation of Chandramukhi's entrance. With the right leg straight and raised slightly off the ground and their arms to the sides, they walk side by side. Then they repeat the step to the other side, this time keeping one arm bent at chest level with palms flexed and facing up, as if to stop some one from advancing.With their finger on their shoulder and their arms raised, they shift their weight between their hips pausing briefly on the fourth beat. In this way, they summarize their shared experience and assert their space."
She then goes on to describe the variations of the dance in functions of Indian diaspora. Some of the description reminded me of dance in an obscure film 'Two Moon Junction' by Sherilynn Fenn and Kristie McNichol.

Tuesday, March 12, 2013

It is not clear to me why I like songs and dances from Hindi films. I am fairly ignorant of Indian classical music, I know very little Hindi and saw very few Indian films after 1960, But I love those songs and dances and follow film blogs from India to USA. As I said in one of those blogs:
"It seems that we know very little about ourselves, let alone about others. If I had known that I would like Hindi songs, I would have learnt it in school. Even though learning Hindi was popular with earlier generations during the Independence movement, we got into anti-imposition mood and did not learn. The government banning Hindi songs from AIR did not help. But there were Hindi films and songs played at functions or sung by various people in the background. I remember my mother singing Rattan songs. Later I started remembering tunes and sometimes lines I heard and after a while started looking for those songs.I used a Aan tune as a lullaby for my children (Jana gana mana did not work) as well as Pather Panchali tune. I was desperate for ‘aeri maito prem diwani’ but could not find it. Around 1992, I was n Allahabad for a conference and asked folks there. They said that it was a famous Meera tune and got me Jogan songs. When I came back to Melbourne and listened to it, it was not the tune I remembered. The search started again. Around 2000, I was in Bombay and visited Rhythm House to find Aan sons to give to my children since they still remembered the tunes. When I mentioned to a friend who came along about the Meera Bhajan and he said that it may be the Nau Bahar song and I finally got it after 40-50 years. This is how it is going on."
I just came across a book which describes the appeal in diverse places even where is no Indian diaspora "Global Bollywood:Travels of Hindi Song and Dance" parts of which are available here. A review by Philip Lutgendorff , and a discussion at Sepia Mutiny.

Saturday, March 09, 2013

"Somehow the very term ‘financialization’, hard to understand and hard to explain, captures something of how remote the world of high commodity finance is from the reality of the vast majority of those who earn their living from agriculture, particularly those in the developing world. For smallholder producers, who make up some 70 per cent of the agricultural world, worries include how to protect and increase soil fertility; how to ensure reliable seeds; where to get credit for the season’s planting; whether the rains will come; where to store the harvest so as to avoid the low prices at harvest time. Guessing at the political mood in Russia or what changes the Dodd-Frank legislation might bring, let alone which way the rouble or the yuan willmove against the dollar, are not factors.
Yet both the increased presence of financial investors as owners and operators of farms (the
financialization of production) in a number of developing countries and the significantly increased activity of speculators and investors in commodity exchange markets (the financialization of price formation and risk management) affect the context in which smallholdersoperate."
From page 48 of the fascinating study 'Cereal Secrets' via Duncan Green who has a brief summary.
Another recent paper along the same lines but shorter is 'Food Price Volatility and Financial Speculation' by Stephen Spratt again linked and summarized by Duncan Green.

Tuesday, March 05, 2013

From The Dawn "The troupe enthralled the audience by performing the play titled ‘I want peace’ at the Sir Shahnawaz Bhutto Memorial Library, Hindu Dharmshala and Hamal village over the weekend.

The programme was organised by the Tehreek-i-Niswan in partnership with the Larkana Social Forum to provide quality entertainment with thought-provoking and meaningful programmes portraying and encompassing political, economic, social and cultural issues with special reference to violence against women."